Crypto exchange Coinbase will be phasing out Borrow, a Bitcoin-backed lending program, in the coming months. It is reported by CoinDesk with reference to representatives of the platform.
Retail customers who have loans are required to pay off all debts by November 20. Otherwise, the exchange itself will sell collateral in digital gold. At the same time, the initiative will not affect the institutionalists.
Borrow allowed to receive a fiat loan up to 40% of the value of bitcoins in the account, but not more than $1 million. The annual rate is ~ 8%.
“We have notified affected loan holders and are taking additional steps to ensure a smooth transition, including providing a four-month repayment period and access to priority customer support through Coinbase One,” the company said in a statement.
According to representatives of the exchange, the decision to close Borrow was made in order to “focus resources on products and services that are of most interest to customers.”
In May, Coinbase stopped issuing Bitcoin-backed loans as part of a repricing process for its products.
Recall that on June 6, the SEC filed a civil lawsuit against Coinbase. The agency accused the exchange of an unregistered offer of securities in the form of a number of tokens.
In July, the trading platform notified customers in California, New Jersey, South Carolina, and Wisconsin that it was suspending its staking service due to local regulatory requirements.
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